What’s gold trying to tell us?

Gold has been ratcheting higher this year. Yesterday it was $1,367 a troy ounce.

It is doing this despite the fact that demand for gold American Eagles is not robust. In the opening days of March, demand for the one-ounce coin has almost stopped. Only 3,000 have been sold.

If gold had been acting like an inflation hedge, the price increases of recent weeks have had some logic behind them. Oil was up. Other commodities were up. Inflation warnings were flashing. Coin buyers, though, weren’t doing as much buying compared to last year.

Oil suddenly has come back down below $100 a barrel and copper has now taken a header, dropping below $3 a pound. Most of last year it traded in a range of $3.20 to $3.40.

Copper is taken as a proxy for the health of the Chinese economy. Demand there is half or more of world copper demand. Stockpiles there are used as collateral for loans.

The sudden sharp decline in copper is not something that would signal inflation. The alternative is deflation. It is plausible if China stops growing and its huge demand for the world’s raw materials stops growing with it.

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Letters to the Editor

Letters to the Editor (Mar. 6, 2018) Many thanks to all who helped at Ocala show
The Ocala Coin club – www.ocalacoinclub.com – held its 35th Annual Coin Show Feb. 1-3, at the Motel 6 Conference Center in Ocala, Fla.
We want to thank the Ocala Coin Club Show Chairman Rich Selvar, club president Mark Trout and the officers and members for providing a table ...